ETHIOPIA: BI-WEEKLY REPORT JULY 17 2006

UNCLAS SECTION 01 OF 02 ADDIS ABABA 002002

SIPDIS

SIPDIS

E.O.12958: N/A
TAGS: PREL PGOV PHUM ETRD ECON ET
SUBJECT: ETHIOPIA: BI-WEEKLY REPORT JULY 17 2006



1. The following reports compiled over the last two weeks
illustrate the variety of economic, political and social
developments occurring in Ethiopia.

World Bank Writes off Ethiopia's 3.61bn Debt
--------------


2. The International Development Association (IDA) has
granted Ethiopia USD 3.61bn in debt relief of Ethiopia's
debt under the Multilateral Debt Relief Initiative (MDRI).
World Bank President Paul Wolfowitz said the debt relief,
effective July 1, would help the poor who need and deserve
better education, health services, greater access to pure
water, and greater opportunities to escape poverty.
According to the World Bank Ethiopia's economic performance
over the past three years had been strong and broad based.
Ishac Diwan, the Bank's country director for Ethiopia and
Sudan, said the main challenges for the Ethiopian economy in
the coming years is to continue to grow while governance
improves.

USAID celebrated 10 years of success of its BESO Project
-------------- --------------


3. USAID celebrated 10 years of its Basic Education Project
(BESO). The event included displays of education and
training materials produced through the past 10 years, a
video of the project's history, and panel discussions.
Attendees at the celebration included education
practitioners from all levels - from the kebele to the
Minister. Many excellent suggestions for future of the
project resulted from the deliberations, and the USAID team
will factor them into future planning and implementation.
The anniversary was opened with remarks from Ambassador
Huddleston and Minister of Education Dr. Sintayehu
Woldemichael.

Parliament recesses; No Inquiry Commission Report
-------------- --------------


4. The House of Peoples' Representatives (HPR) went into
recess on July 7 until October 9, 2006 without hearing the
scheduled Inquiry Commission's report. The Inquiry
Commission was established by the HPR to investigate the
violence that occurred in some parts of the country
following the May 2005 elections. The Commission had
obtained a time extension from the HPR but once again failed
to report its findings on schedule. The Commission was
supposed to present its report to the House on July 7, 2006,
the final day before the house went into recess for the next
three months. No explanation was given as to why the
commission was unable to present its findings to the House
as scheduled. Leaders of the parliamentary opposition
expressed their concern in private regarding the issue.

House Passes Budget Bill, Extends Electoral Board Tenure
-------------- --------------

5. The House of Peoples' Representatives (HPR) on July 4
passed a bill providing for a 35.551 bn Birr budget for the
2006/07 fiscal year ($1 = 8.7 Birr). The House also
endorsed a resolution providing for the extension of the
tenure of the National Electoral Board until October 2006.
Of the total approved budget, 16.067 bn Birr goes for the
capital budget and 9.987 bn for budgetary subsidies to
regional states and 9.497 bn for recurrent budget. The
extension of the Board's tenure was necessitated to conclude
the inter-party consultations during the parliamentary
recess and subsequently appoint new board members when the
House reopens after the recess.

Political Harmony Essential to Reduce Poverty
--------------


7. World Bank President, Paul Wolfowitz stressed the
importance of political harmony in order to reduce poverty
in Ethiopia. Mr. Wolfowitz said resumption of aid to
Ethiopia had to be followed by government action to provide
political stability. Last year the World Bank cut its
direct budget support to Ethiopia after violence following
disputed elections left at least 80 dead. Following talks
with Prime Minister Meles Zenawi and opposition politicians,
Mr. Wolfowitz told reporters that "As a development bank, we
are more concerned with development and poverty reduction
but we do not ignore political harmony." "The World Bank
requires the right atmosphere to work with, such as
transparency, independent justice and political harmony in
the country."


8. World Bank President Paul Wolfowitz said the bank will
further strengthen its financial assistance to the ongoing

ADDIS ABAB 00002002 002 OF 002


poverty reduction and development efforts in Ethiopia. The
Ethiopian government and the World Bank have maintained a
long-standing economic cooperation over the years. During
talks with Prime Minister Meles and other cabinet members on
July 13, Wolfowitz said the World Bank will continue
supporting Ethiopia in its efforts to advance its economy.
Prime Minister Meles briefed Mr. Wolfowitz about the
development policies pursued in Ethiopia and the multi-
faceted activities being carried out in the country to
accelerate economic development. Wolfowitz's first-ever
visit to Ethiopia has enabled him to closely observe the
strenuous battle against poverty in this country. During
his visit to the Parliament, Wolfowitz said creating
peaceful political situation in Ethiopia would be exemplary
to other African countries besides contributing toward
ensuring sustainable economic development in the country.
Sharing of ideas between members of the ruling party and
that of the oppositions in the parliament through mutual
respect and friendship could be exemplary to other African
countries.

Former US President visits Ethiopia to launch project
-------------- --------------

9. Former US President Bill Clinton arrived in Addis Ababa
on July 15 to pay a working visit of the various projects
supported by the Clinton Foundation, focusing on rural
development, HIV/AIDS and hospital management. He met with
Prime Minister Meles Zenawi and other government officials.
Former President Bill Clinton visited ALERT Hospital in
Addis Ababa to break ground for Ethiopia's family-focused
pediatric AIDS treatment program. He also met with a cross
section of the society at the Africa Union Hall.


10. Former US president Bill Clinton launched a program to
help children suffering from AIDS in Ethiopia, where close
to 3 million people are estimated to be infected with the
deadly virus. Under the program, the Clinton Foundation
will fund 250,000 dollars and provide 23 medical experts
from Yale University to work in 13 hospitals across the
country for one year. The Clinton Foundation will provide
the clinic with necessary equipment and medical supplies in
addition to train health officials and boost hospital
management systems. Former President Clinton laid the
foundation stone for a clinic for orphans on July 16.
Nearly a million Ethiopian children have been orphaned by
the disease and about 5,000 new infections are recorded
weekly.

HUDDLESTON